Calculating Cost of Goods and Gross Profit

To calculate the cost of goods and gross profit, we need to follow the steps below:

Step 1: Determine the Gross Profit

The first step is to determine the gross profit, which is given as 33 1/3% on sales. To calculate this, we can use the following formula:

Gross Profit = Net Sales - Cost of Goods Sold

Since we know the gross profit percentage, we can rearrange the formula to solve for the cost of goods sold:

Cost of Goods Sold = Net Sales - Gross Profit

Substituting the given values, we get:

Gross Profit = 33 1/3% x 800000 = 266666.67

Step 2: Calculate the Cost of Goods Sold

Using the formula above, we can calculate the cost of goods sold as:

Cost of Goods Sold = 800000 - 266666.67 = 533333.33

This means that the total cost of producing and selling the goods was $533,333.33.

Step 3: Determine the Gross Profit Margin

The gross profit margin is another important metric that tells us the percentage of each sale that is profit. It is calculated as:

Gross Profit Margin = Gross Profit / Net Sales x 100%

Substituting the given values, we get:

Gross Profit Margin = 266666.67 / 800000 x 100% = 33.33%

This means that for every $1 in sales, the company earns 33.33 cents in gross profit.

Conclusion

In conclusion, the cost of goods sold for this company was $533,333.33 and the gross profit was $266,666.67. The gross profit margin was 33.33%. These metrics are important for evaluating the profitability of a company and making informed business decisions.

Net sales(RFO)= 80000GP is 33% on sales that is 80000×33÷100=26667cost of revenue from operation (CRFO)=RFO-GP CRFO=80000-26667=53333